The city of Mersey is planning to construct a bridge across the Cavendashim river. The first cost of the bridge will be $6611100. Annual maintenance and repairs will be $26233 for the first 5 years, and then will increase to $42927 for each of the next 10 years. For the final 5 years, the annual maintenance and repairs will increase again to $51791 per year. A major overhaul of $471158 will be performed at the end of year 9. Using an interest rate of 6%, what is the equivalent uniform annual cost for the 20-year period?

Hint: Since this is an equivalent uniform annual cost, do you need to indicate that as negative? See example 6-3 and 6-4 in the book.

Enter your answer as 1234

Round your answer. Do not use a dollar sign ("$"), any commas (","), or a decimal point (".").

Beck Inc. and Bryant Inc. have the following operating data:

a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.

b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number.

c. The difference in the   of income from operations is due to the difference in the operating leverages. Beck Inc.'s   operating leverage means that its fixed costs are a   percentage of contribution margin than are Bryant Inc.'s.

Problem 13-3A Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $1,100,000 of current assets, a current ratio of 2.60:1, and an acid-test ratio of 1.30:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $55,000 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $55,000 for $150,000 cash. 10 Collected $31,000 cash on an account receivable. 15 Paid $29,000 cash to settle an account payable. 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account. 22 Declared a $1 per share cash dividend on its 65,000 shares of outstanding common stock. 26 Paid the dividend declared on May 22. 27 Borrowed $90,000 cash by giving the bank a 30-day, 10% note. 28 Borrowed $105,000 cash by signing a long-term secured note. 29 Used the $195,000 cash proceeds from the notes to buy new machinery. Required: Complete the table below showing Plum's (1) current ratio, (2) acid-test ratio, and (3) working capital after each transaction. (Do not round intermediate calculations. Round your ratios to 2 decimal places and the working capitals to nearest dollar amount. Subtracted amount should be indicated with a minus sign.)

9.Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $300,000 if credit is extended to these new customers. Of the new accounts receivable generated, 6 percent will prove to be uncollectible. Additional collection costs will be 5 percent of sales, and production and selling costs will be 78 percent of sales. The firm is in the 25 percent tax bracket.

a. Compute the incremental income after taxes.

b. What will Johnson’s incremental return on sales be if these new credit customers are accepted? (Input your answer as a percent rounded to 2 decimal places.)

c. If the accounts receivable turnover ratio is 3 to 1, and no other asset buildup is needed to serve the new customers, what will Johnson’s incremental return on new average investment be? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Comparative balance sheets for 2021 and 2020 and a statement of income for 2021 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided.

Additional information from the accounting records:

1. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2021.
2. During 2021, equipment with a cost of $270,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $170,000 and $425,000 for stock dividends and cash dividends, respectively.

Required:
Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2021. Present cash flows from operating activities by the direct method. (Enter your answers in thousands (i.e., 10,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

Boomerang Corporation, a New Zealand corporation, is owned by the following unrelated persons: 40 percent by a U.S. corporation, 15 percent by a U.S. individual, and 45 percent by an Australian corporation. During the year, Boomerang earned $3,000,000 of subpart F income. Which of the following statements is true about the application of subpart F to the income earned by Boomerang?

Multiple Choice Boomerang is a CFC and the U.S. corporation and U.S. individual will have a deemed dividend of $1,200,000 and $450,000, respectively. Boomerang is a CFC and only the U.S. corporation will have a deemed dividend of $1,200,000. Boomerang is a CFC and the U.S. corporation, U.S. individual, and Australian corporation will have a deemed dividend of $1,200,000, $450,000, and $1,350,000, respectively. Boomerang is not a CFC and none of the shareholders will have a deemed dividend under subpart F.

1. Why would an activity-based costing (ABC) system appeal to some companies, and what is the criterion for utilizing an ABC system?
2. Describe the advantages for using the ABC method versus a single plantwide rate or multiple departmental overhead rates; and specify any limitations that exist when using these conventional type overhead rates?
3. Provide an example of a company that would benefit from using an ABC system, and describe a few of the different activities they might use.

Job Order Costing Journal Entry Problem:

[The following information applies to the questions displayed below.]

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify):

Transactions and events during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $13 cash on March 1 using a short-term note.
2. Purchased land on March 2 for future building site; paid cash, $7.
3. Issued additional shares of common stock on April 3 for $31.
4. Purchased software on July 4, $12 cash.
5. Purchased supplies on account on October 5 for future use, $17.
6. Paid accounts payable on November 6, $14.
7. Signed a $30 service contract on November 7 to start February 1, 2019.
8. Recorded revenues of $176 on December 8, including $48 on credit and $128 collected in cash.
9. Recognized salaries and wages expense on December 9, $93 paid in cash.
10. Collected accounts receivable on December 10, $32.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $8.
12. Supplies counted on December 31, 2018, $11.
13. Depreciation for the year on the equipment, $7.
14. Interest of $2 to accrue on notes payable.
15. Salaries and wages earned but not yet paid or recorded, $11.
16. Income tax for the year was $9. It will be paid in 2019.

C4-2 Part 6

1. 6-a. Prepare an income statement.

2. 6-b. Prepare the statement of retained earnings.

3. 6-c. Prepare the balance sheet.

The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company’s products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product Demand Next year (units) Selling Price per Unit Direct Materials Direct Labor Debbie 72,000 $ 18.00 $ 4.90 $ 4.05 Trish 64,000 $ 6.50 $ 1.80 $ 1.89 Sarah 57,000 $ 30.00 $ 9.74 $ 6.75 Mike 40,000 $ 15.00 $ 4.20 $ 4.95 Sewing kit 347,000 $ 10.20 $ 5.40 $ 1.44 The following additional information is available: The company’s plant has a capacity of 155,110 direct labor-hours per year on a single-shift basis. The company’s present employees and equipment can produce all five products. The direct labor rate of $9 per hour is expected to remain unchanged during the coming year. Fixed manufacturing costs total $605,000 per year. Variable overhead costs are $5 per direct labor-hour. All of the company’s nonmanufacturing costs are fixed. The company’s finished goods inventory is negligible and can be ignored. Required: 1. How many direct labor hours are used to manufacture one unit of each of the company’s five products? 2. How much variable overhead cost is incurred to manufacture one unit of each of the company’s five products? 3. What is the contribution margin per direct labor-hour for each of the company’s five products? 4. Assuming that direct labor-hours is the company’s constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 155,110 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)?

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 20% each of the last three years. He has computed the cost and revenue estimates for each product as follows:

The company’s discount rate is 18%.

Required:

1. Calculate the internal rate of return for each product.

2. Calculate the project profitability index for each product.

3. Calculate the simple rate of return for each product.

4a. For each measure, identify whether Product A or Product B is preferred.

Nautical Creations is one of the largest producers of miniature ships in a bottle. An especially complex part of one of the ships needs special production equipment that is not useful for other products. The company purchased this equipment early in 2016 for $200,000. It is now early in 2020, and the manager of the Model Ships Division, Jeri Finley, is thinking about purchasing new equipment to make this part. The current equipment will last for six more years with zero disposal value at that time. It can be sold immediately for $30,000. The following are last year's total manufacturing costs, when production was 7,800 ships:

The cost of the new equipment is $135,000. It has a six year useful life with an estimated disposal value at that time of $50,000. The sales representative selling the new equipment stated, "The new equipment will allow direct labor and variable overhead combined to be reduced by a total of $2.05 per unit." Finley thinks this estimate is accurate, but also knows that a higher quality of direct material will be necessary with the new equipment, costing $0.23 more per unit. Fixed overhead costs will decrease by $4,700.

Finley expects production to be 8,350 ships in each of the next six years. Assume a discount rate of 5%.

REQUIRED

1. What is the difference in net present values if Nautical Creations buys the new equipment instead of keeping their current equipment?

Present Value of $1.00

Present Value of an Annuity of $1.00

QUESTION 3

On 1 January 2018, MM Bhd acquired a fast food franchise for RM300,000. The legal life of the franchise is seven (7) years while the economic useful life is six (6) years. On 31 December 2018, the franchise was revalued at RM340,000. Due to the outbreak of the COVID-19 at the end of year 2019, sale of fast food from the franchise is declining. Impairment test conducted showed that the fair value of the franchise was RM250,000. At this date the current trend of the outbreak indicates further sale declining in the next six (6) months. The company adopts the revaluation model to record the franchise.

The company also has legal title to a soft drink brand which was acquired on 1 January 2019 at RM350,000. The brand product is expected to generate cash inflow indefintitely. However, there is no active market available for this type of soft drink. On 31 December 2019, impairment test conducted showed the recoverable amount of the brand was RM310,000.

Financial year end for the company is 31 December.

REQUIRED:

1. Prepare journal entries to record the accounting treatment related to the franchise of MM Bhd on 31 December 2018 and 31 December 2019.
2. Explain the accounting treatment for the soft drink brand of MM Bhd on 31 December 2019.

ABC Company produces a chemical. At the start of the year, they had the following cost information:

ABC Company computes its overhead rates using practical volume, which is 72,000 units. The actual results are as follows:

a. Units produced: 70,000.

b. Direct materials purchased: 744,000 pounds @ $1.50 per pound.

c.   Direct materials used: 736,000 pounds.

d. Direct labor: 56,000 hours @ $17.90 per hour.

e. Fixed overhead: $214,000

f.   Variable overhead: $175,400

Required: You must show all your calculations for question 1 (below) to get credit.

1. Calculate all the following variances:

a. Direct materials price and efficiency variances.

b. Direct labor price and efficiency variances.

c.   Variable overhead price and efficiency variances.

d. Fixed overhead price and efficiency variances.

2. Record all the necessary journal entries for:

a. Materials purchases.

b. Materials used in production.

c.   Direct labor costs incurred in production.

d. Actual variable overhead costs incurred.

e. Variable overhead costs applied.

f.   Actual fixed overhead costs incurred.

g. Fixed overhead costs applied.

h. Recognition of variable overhead variances.

i.    Recognition of fixed overhead variances.

j.    Closing of all the variance accounts

Freight Terms

Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. If required, round the answers to the nearest dollar.